Trade groups representing automakers and parts manufacturers are "gravely concerned" by reports that the Trump administration is considering an entry-into-force date of June 1 for all sections of the USMCA, including automotive rules of origin, as the industry struggles to mitigate ongoing disruption caused by the novel coronavirus.
Canadian lawmakers ratified the U.S.-Mexico-Canada Agreement on March 13 before leaving for a weekslong break to halt the spread of COVID-19. Canada was the last of the three countries to sign off on the new North American trade deal replacing NAFTA.
The groups, which include the American International Automobile Dealers Association and the National Automobile Dealers Association, said in a statement issued Friday after the ratification that the three countries "have yet to issue, even in draft form, the uniform automotive rules-of-origin regulations," requiring that 75 per cent of auto content be made in North America. The groups said it would require additional time to interpret and implement the auto provisions under USMCA, especially as the industry focuses on managing production during a global pandemic.
"Rushing forward with these new rules without the industry understanding what the rules of the game are or having the rules in place is shortsighted," Cody Lusk, CEO of AIADA, told Automotive News. "It would have a negative impact on our business and the industry and American consumers."
Flavio Volpe, head of the Automotive Parts Manufacturers' Association in Canada, says he'd like to see the new deal be enforced beginning Jan. 1, 2021.
"We’re concerned about enforcement on June 1," he said, saying there is a difference between coming into force and being enforced.
He said all three countries have been working on harmonizing rules and planning enforcement methods for the last 15 months, and continue to work together.